Your inputs will be collected at the very beginning, as part of the kickoff for your incorporation. You will be expected to provide:
- Company name
The name of your existing legal entity, as well as the names you'd like your Cayman holding and LLC intermediary to have. You can always change them later, but you'd have to pay for an additional filing. Make sure to check the name compatibility on the Delaware website before you settle for a name.
- CNPJ
The registration number for your existing legal entity in Brazil, which was issued when you first set it up. You should be able to find this information in any of your company's documents, including Nota Fiscais it has issued.
- Primary CNAE number
CNAE stands for National Classification of Economic Activities, and it determines the tax treatment for your company based on how it makes money. You'll typically find this under the name "Classificação CNAE".
- Brazilian company's digital certificate
A digital certificate for your company's CNPJ will be required to make filings with the authority. If you have one, you'll be requested to share it. If you don't, you'll first be connected with a partner who can provide it as a service.
- Latest version of the Articles of Incorporation (Contrato Social)
When you set up your legal entity, you filed its Articles of Incorporation with the local Trade Board, aka Junta Comercial, and you may have updated it since. They're known as "Contrato Social" in Portuguese, and we'll ask for the initial version and all of the amendments since.
- Register of Members & Directors (Quadro de Sócios e Administradores)
During your original incorporation in Brazil, you were required to appoint administrators with the power to represent the company, and to disclose all members holding equity. We'll ask for a copy of the document listing all of the shareholders and administrators, which you filed with the Trade Board (Junta Comercial).
- Equity distribution for all shareholders
A breakdown of the amount of shares/percentage of ownership each shareholder has, which you'll be able to detail during the process.
- Stock Option Pool (optional)
You'll have the choice to set up an Option Pool if you'd like, and will be asked for the allocation percentage in case you opt in. You should define this with your co-founders, investors and lawyers. Option pools typically range from 10% to 20% depending on company size and stage. Learn more about ESOPs.
- Proof of ID for founders
It can be any government-issued ID document like an RG/CRNM/RNE, a driver’s license or a passport.
- Proof of residence for founders
An electronically issued utility bill (e.g. internet, water, electricity) or bank statement. Pictures or digitized versions of hard copies are not accepted. The document needs to be under the founder’s own name – bills under a spouse or parent's name are not accepted.
- KYC info for shareholders owning 10% or more of the company
If an individual or legal entity owns 10% or more of your business, our partners will need to know a bit more about them before they can be serviced. In Brazil, any person or entity owning 25% or more in equity also qualifies as Ultimate Beneficial Owner, and we'll also need to report their participation as a shareholder to Brazilian authorities. To do both things, we will collect the full name, equity stake, proof of address and proof of ID or of incorporation for any shareholders owning or controlling more than 10% of your company.
- Director appointments for the Cayman holding company
Directors have the power and responsibility to issue shares and options, sign board resolutions, enter into contracts on behalf of the company, create bank accounts and manage cash flow. They hold high authority at the Cayman level of your company structure, and you will be asked to appoint who they are.
- Yearly Income Tax report
This will only be applicable for shareholders whose equity stakes are worth US $15,000 or more, and will be requested further down the process. It is part of the Know Your Customer process for the Foreign Exchange service provider, who will assist with creating a registered transaction required to make your company compliant with Brazilian authorities' in case of foreign investment–which your new corporate structure technically counts as.
- Balance sheet and income statement
Once the flip is completed, you'll be asked for a financial statement for the company in Brazil reflecting the change, and reporting its legal entity's assets, liabilities and shareholder equity. This will be filed with the Central Bank as part of officializing the exchange of shares of your local company for shares of the Cayman holding. You can ask your business' accountant for help.
Got any questions?
Reach out at formation@latitud.com or via WhatsApp and we'll be happy to answer them.